On the other hand, there is a key point that worries the local producer and that has the Government working and that is the one referring to the normal supply of fertilizers. It is that wheat needs this key input to reach its maximum production level and so far the Government ensures that there will be enough fertilizers during the campaign, although on the other hand the high prices of the product could be more than a problem going forward.
In the same way that the war in the Black Sea is raising the price of commodities, it is also impacting the value of fertilizers, and this is news that can complicate the scenario. As indicated by the Rosario Stock Exchange: “With a view to the 2022/23 campaign, which will begin in December of this year, the United States Department of Agriculture (USDA) published its first estimates of production and foreign trade for the wheat in Argentina. Projecting less planted area and lower yields than the current campaign, the USDA forecasts a production of 18.6 Mt of wheat 2022/23. In line with a nearly 15% lower harvest, 12.6 Mt of wheat exports (including flour) are expected for the next business year. The USDA highlights the high prices of fertilizers as an element of uncertainty when making planting decisions in Argentina, a global fact that our country is not exempt from.”
In parallel, another fear that appears from the productive sector is a possible greater intervention of the market by the Government. For now, from the ruling party they emphasize that as long as the balance volumes are met there will be no type of inconvenience for the export sector, while in terms of withholdings it was the Minister of Agriculture, Julián Domínguez, who repeatedly stated that The possibility of increasing the tribute is not in the folder.
Marketing campaign 2021/22
Meanwhile, the only sure thing is that the 2021/ campaign was a complete success, not only in yields but also in marketing. As detailed by the BCR: “hand in hand with its productive record, Argentine wheat has been supplying the Argentine domestic market, as well as the various export markets. From the beginning of the harvest last December to the end of April, we estimate that wheat exports have already totaled 11.8 million tons. In this way, the historical export record is consolidated, while the exported tonnage amounts to a figure equivalent to just over 81% of the established balance volume. With this important level of exports, the cereal would have exceeded US$3.4 billion in foreign trade FOB value in April”.
In this way, now it only remains to wait what will become of the campaign that will be launched in the coming weeks and if it will be able to follow the same path as its predecessor. For now, international prices are still accompanying.
Source: Ambito
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